In
a speech Wednesday held at George Washington University, President Barack
Obama urged the Department of Defense to lead a "fundamental review" of
U.S. military missions and capabilities in a bid to cut $400 billion over
10 years. The goal will be to hold growth in the defense base budget below
inflation, which would save $400 billion by 2023, according to the White
House. This deficit reduction effort is in addition to the savings
generated from ramping-down overseas contingency operations, the White
House said. Obama’s announcement Wednesday amounts to an abrupt doubling
in proposed spending cuts just two months after he proposed his fiscal
2012 budget, which has yet to be acted on by Congress.

"We
need to not only eliminate waste and improve efficiency and effectiveness,
but conduct a fundamental review of America's missions, capabilities and
our role in a changing world," Obama announced late in the speech. White
House and Pentagon officials later confirmed that Obama was proposing
another $400 billion in cuts on top of the savings projected over the next
decade in the administration’s fiscal 2012 budget.

The
additional cuts are intended to stretch across all security-related
agencies, including the departments of Homeland Security and Veterans
Affairs, the Director of National Intelligence, the Central Intelligence
Agency and some portions of the State and Energy departments. In a
statement, Pentagon officials offered support for Obama’s review of
defense programs. “The Department of Defense cannot be exempt from efforts
to bring federal deficit spending under control. However, it is important
that any reduction in funding be shaped by strategy and policy choices and
not be a budget math exercise,” Pentagon Press Secretary Geoff Morrell
said in a prepared statement on behalf of Defense Secretary Robert M.
Gates.

House
Armed Services Committee Chairman Howard “Buck” McKeon (R-CA) expressed
concerns about the White House announcing a $400 billion cut to national
security spending while troops are fighting in three different theaters,
stating, “assigning a specific number to national security cuts prior to
the completion of a comprehensive review of our military’s roles and
missions seems to be putting the cart before the horse.”

House,
Senate, and White House Negotiate FY11 Spending
Package

In
an eleventh hour deal to keep the government running through September
2011, President Obama, Senate Democrats, and Congressional Republicans
agreed last week to the Fiscal Year 2011 Continuing Resolution, cutting
between $38 billion and $39 billion from current discretionary and
mandatory spending levels.

The
defense section of this legislation provides $513 billion, $5 billion more
than in Fiscal Year 2010. The bill also includes an additional $157.8
billion for overseas contingency operations. The measure includes $126.7
billion for military personnel, $165.6 billion for operations and
maintenance, $102.1 billion for procurement, $75 billion for research and
development, and $31.4 billion for defense health programs. This
legislation eliminates all defense earmark account funding, a cut of $4.2
billion from last year’s level.

The
House voted to pass the bill Thursday afternoon in a 260 to 167 vote.
Despite concerns, most Republicans rallied behind House Speaker John
Boehner, saying they were eager to move to bigger spending battles. In an
81-19 vote Thursday evening, the Senate voted to pass the bill, allowing
Congress to head home for the Easter recess scheduled to take place from
April 18-May 1.

House
to Vote on FY 2012 Budget Resolution

Concurrent
with the FY2011 spending package vote, the House is schedule to consider H
Con Res 34, the GOP budget resolution for FY2012 on Thursday and Friday.
As a result of the fiscal 2011 defense spending agreement, the fiscal 2012
proposal almost certainly will be reduced by Congress, despite repeated
pleas from Defense Secretary Robert M. Gates that troop readiness and
force modernization would be significantly affected. While the FY2012
budget resolution will pass the House, it is not expected to be taken up
by the Senate. It is unclear when or if the Senate will move on its own
FY2012 plan.

The
resolution calls for total spending of $3.53 trillion in FY 2012, $179
billion (5%) less than requested by the Obama administration. The measure
projects spending and revenue levels that would produce a deficit of $995
billion in FY 2012, which is $169 billion less than the deficit under the
administration's request. The measure's total for non - emergency
discretionary spending is $1.019 trillion, $102 billion less than
requested by the administration. The measure sets out a special
enforcement procedure for certain tax-cutting measures that would allow
the Budget Committee to adjust certain budget authority allocations prior
to floor consideration to avoid a point of order. These measures include
extending the 2001 and 2003 tax cuts, adjusting the alternative minimum
tax (AMT), extending the current estate tax rates, providing a 20%
deduction to small business and authorizing trade agreements, among
others.

Of
the amount of non-emergency discretionary spending assumed in the
resolution for FY 2012, $659 billion (65%) would be for defense and
related security spending, $3 billion more than the administration
request. The totals do not include funds for the wars in Iraq and
Afghanistan, which are provided under a separate budget category and would
not count toward the discretionary spending caps. The resolution assumes
$118 billion in emergency funds in FY 2012 for the wars in Iraq and
Afghanistan. Within the amount provided for security, $539 billion would
be set aside for the Defense Department, $44 billion would be set aside
for Homeland Security, $74 billion would be set aside for Military
Construction and Veterans Affairs, and $2 billion would be set aside for
other security spending.

·$672
million from the Joint Improvised Explosive Device Defeat Organization
because of revised requirements;

·$500
million from the Iraq security forces fund;

·$473
million from the Army manned ground vehicle, resulting from pricing
adjustments;

·$457
million from the termination of the Non-Line of Sight Launch System; and

·$272
million from an almost one-year delay in the contract award for the
Theater High Altitude Area Defense weapon.

The
bill does not include funds for the F-35 Joint Strike Fighter alternative
engine program, which the president and Gates had ordered
terminated.

The
resolution expresses the sense of the House that debt is an immense
security threat to the country, just as Adm. Mike Mullen, Chairman of the
Joint Chiefs of Staff, has stated. It also notes that the bipartisan
National Commission on Fiscal Responsibility and Reform and the bipartisan
Rivlin-Domenici Debt Reduction Task Force were correct in concluding that
all programs, including national security, should be "on the table" as
part of a deficit-reduction plan. The resolution states that any budget
plan serious about reducing the deficit must follow this precept to
consider all programs, including national security programs, the largest
segment of discretionary spending.

Quote
of the Week

“As
Commander-in-Chief, I have no greater responsibility than protecting our
national security, and I will never accept cuts that compromise our
ability to defend our homeland or America’s interests around the world.
But as the Chairman of the Joint Chiefs, Admiral Mullen, has said, the
greatest long-term threat to America’s national security is America’s
debt.”

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